For a few weeks, the banking turmoil set off in early March has settled into an uneasy calm. This peace is likely to be disturbed soon, first by the release of consumer price and producer price indices for March and then by earnings announcements from major US banks. Last Friday’s jobs numbers for March, showing slower but still-robust employment growth in the US, provided substantial assurances to investors that the US economy continues to move forward at a healthy pace. For the past year, investors have hoped for weakening monthly economic data that would encourage the Federal Reserve to pause its pace of interest rate hikes to tackle inflation. As a result, long duration equities such as the tech heavy Nasdaq have outperformed, pushing valuation multiples further above long-term averages as we enter another earnings season. In essence, whereas softening economic data used to signal good news to investors — that the Fed could potentially stop raising rates and possibly cut — now, weakening economic data makes investors worried that the slowing economy could fall into an economic and/or corporate earnings recession. On the wealth planning front, April is Financial Literacy Month. In this spirit, we are addressing a question that we often receive about education accounts: Are there any benefits to funding a 529 plan if my child is already in high school?
Click Here to Read the April 10, 2023, Economic Commentary
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